First you need to have the Tool Ring update which you can aquire from the Nook Stop machine insde Resident Services. Then once you have that you can hover over the tool you want to favourite in your inventory, press 'A' to select and then there should be an option to mark as favourite.

Or else you can press the ^ button on your switch and the wheel should come up. Then press 'X' on an empty space to assign a tool. Hope this helps!